LOS ANGELES--(BUSINESS WIRE)--A relentless rise in housing costs is hurting Los Angeles’
fastest-growing industries by making it significantly harder to recruit
and retain workers. Yet most employers have not taken steps to assist
employees with housing or implement programs to reduce their financial
burdens, according to a new study released today by the USC Price Center
for Social Innovation. The report, The
Affordable Housing Crisis in Los Angeles: Impacts to LA’s Fastest
Growing Companies, was released in partnership with the
Los Angeles Business Council Institute and examines how the high cost of
living in Los Angeles is impacting local industries experiencing the
most job growth.

“Housing affordability is a significant concern for the Los Angeles
workforce,” said Dr. Gary Painter, director of the USC Sol Price Center
for Social Innovation and the newly created Homelessness Policy Research
Institute. “Commute times are increasing for homeowners who are unable
to afford housing in the L.A. region, and housing costs are outpacing
wage growth for renters. These conditions are especially burdensome for
the region’s entry-level and low-wage workers.

“Without direct and decisive action by employers to help their
employees, we risk a situation where the rapid growth of our regional
economy stalls and then stagnates as workers leave and pursue employment
options elsewhere,” said Painter.

The Price Center’s report examined how the housing crisis is affecting
employers in the region’s three fastest-growing sectors: health care and
social services; accommodation and food services; and professional,
scientific and technical services.

The study found that wages in these three sectors are not keeping pace
with the region’s soaring housing costs and that commute times for
workers in these industries are rising across the board – results that
raise concerns about whether the region’s current job growth is
sustainable in the long run. As one example, L.A.’s booming tourism
industry now accounts for more than 525,000 local jobs, yet 69 percent
of workers in this sector earn less than $25,000 annually. A similar
situation exists in the field of home health aides, where the median
annual wage is $22,600, forcing a large portion of these workers to live
in poverty.

“This trend is extremely worrisome because there will be a breaking
point for employees forced to choose between sky-high rents, substandard
conditions or long commutes – and they are likely to pick getting out of
L.A.,” said Mary Leslie, president of LABC. “As a business community, we
need to acknowledge that housing is not a siloed issue – it has a domino
effect far beyond the housing market. To ensure continued success,
employers should factor the cost of housing into their overall business
strategy, in tandem with wages and traditional benefits.”

While most employers report that the high cost of housing is having a
profoundly negative impact on employee recruitment, retention and
quality of life, 61 percent of respondents said they didn’t have any
programs in place to help reduce their employees’ housing burden. Just
over half were unaware that housing-related assistance was a possible
solution.

However, companies that have taken steps to assist employees in reducing
their financial burdens, such as sweetening hiring packages, reported
more success maintaining their workforce.

To ease employees’ financial burdens, The Affordable Housing Crisis
in Los Angeles recommends that businesses provide a series of
resources that are relatively low cost but carry high returns. Chief
among them are homebuyer education, relocation reimbursement, mortgage
assistance and financial education. The report also urges businesses to
factor the cost of housing into their broader corporate strategy,
influencing decisions on compensation, benefits packages and company
policies, such as telecommuting or flexible hours.

On a policy level, the report encourages employers to seize
opportunities to support and advocate for housing at all income levels
and help build bridges between private, nonprofit and public entities to
address housing costs.

“Frequently, employers are surprised to find that their employees have
qualified to purchase a home through Habitat for Humanity. They
are unaware their own employees and coworkers are struggling to find
adequate and affordable housing,” said Erin Rank, president & CEO at
Habitat for Humanity of Greater Los Angeles. “Through this report, we
are encouraging businesses to have a conversation with their employees
about the state of housing they experience in an effort to understand
the basic needs of their workers and develop a plan of action.”

The Affordable Housing Crisis in Los Angeles: Impacts to LA’s Fastest
Growing Companies will be formally released Friday at the Los
Angeles Business Council’s 17th Annual Mayoral Housing, Transportation
and Jobs Summit, held at UCLA. The event will feature panels of experts
in housing and transportation policy; leaders in technology and
business; and elected officials, including State Attorney General Xavier
Becerra, Mayor Eric Garcetti, Sen. Scott Wiener, Assemblymember Laura
Freidman and Assemblymember David Chiu.

The Los Angeles Business Council and the USC Price Center for Social
Innovation conducted the survey with the support of the California
Community Foundation, Enterprise Community Partners, Federal Home Loan
Bank of San Francisco, FivePoint and Habitat for Humanity. More than 18
employers representing over 84,000 employees participated in the study.

About the Los Angeles Business Council

The Los Angeles Business Council is one of the most effective and
influential advocacy and educational organizations in California. For
over 70 years, the LABC has had a major impact on public policy by
harnessing the power of business and government to promote environmental
and economic sustainability in the Los Angeles region. To learn more,
please visit www.labusinesscouncil.org.